Qualcomm entered into a 3G and 4G patent licensing agreement with Xiaomi, in a deal which could be seen as benefiting both companies.
The US chipmaker has long faced troubles in China, which were only resolved earlier this year – accompanied by a $975 million fine and a pledge to modify its licensing practices. Even so, the company recently said that vendors in the country are moving slowly on new deals, with some under-reporting sales in order to cut licensing bills.
In a statement, Qualcomm said that the royalties payable under the new Xiaomi deal are “consistent with the terms of the rectification plan submitted by Qualcomm to China’s National Reform and Development Commission”.
With Xiaomi being one of the leading smartphone players in the market, the new deal indicates at least some movement in the right direction for Qualcomm. It comes shortly after similar deals with TCL and ZTE.
Meanwhile, there has been some concern about Xiaomi’s potential exposure to patent litigation, particularly as it expands its presence outside of its home market. As a relatively new player in the space, it does not have the kind of patent armoury of its key rivals to use in defence.
The company has already been on the receiving end of an action in India initiated by Ericsson, although in this case devices powered by Qualcomm processors were not impacted – unlike Xiaomi’s MediaTek powered smartphones.
“A license from Qualcomm will play an important role in helping us bring the newest and most innovative products to our growing customer base,” said Lei Jun, CEO of Xiaomi.